Former official: Reducing deficit crucial to US economy

As students returned from spring break Sunday night, the U.S. budget deficit stood at approximately $1.4 trillion.

Alice Rivlin, the first director of the Congressional Budget Office who sits on two government debt reduction commissions, said in a speech at the university late last month that solving the deficit problem is crucial to the nation's economic viability.

"If a woman of my age is spending that much time on commissions, either she's crazy or just must think this is really important," said Rivlin, who is 80 years old. "And I really do."

She explained the basics of the national debt and discussed the implications of the economic recession at the Alfred Lerner College of Business & Economics' annual Hutchinson Lecture on March 22. The Hutchinson Lecture invites nationally prominent economists to speak to students each year.

Rivlin said the biggest catalyst of the burgeoning national debt and deficits is rising health care costs, especially with the movement of the Baby Boomer generation into Medicare.

"This is not a new problem. We didn't just discover the Baby Boomers; they were born right after World War II and include three of my children," she said. "Why didn't we face up to this problem sooner? It was easier not to. But now we basically have to."

While debt of this proportion is an economic challenge, Rivlin said it poses an even greater political obstacle.

"Can our democracy deal with a challenge where all the options are unpleasant and unpopular?" she said. "That's a real test for a democracy."

Rivlin said the country has only two options: spend less or tax more.

Saul Hoffman , chair of the economics department, said he was excited to choose a woman to be the Hutchinson speaker for the first time.

"We knew that we had never had a woman and knew that she was very active in this defect and debt reduction problem," Hoffman said. "We just thought she'd be such a timely speaker."

English instructor Dorothy Ross said Rivlin's speech left her "pleased as punch." Ross, who received a bachelor's degree in economics from Cornell University, was impressed with Rivlin's ability to make confusing economic jargon easily understood.

"She took issues that a lot of people like to make sound very complicated, and she made them very straightforward and easy to follow," Ross said. "I think that's a gift."

Senior economics major Natalie Sabadish said the speech was relevant to the issues facing the country.

"It's great to hear insight from someone on the inside," Sabadish said.

Rivlin concluded her speech with a call to action to Sabadish and the other students on the room. Despite the mounting debt, she said she remains hopeful a solution can be reached.

"People in colleges, people in towns all across the country, have got to encourage their politicians to look this problem in the face and do something about it, or they won't have the courage to do it," Rivlin said. "But I am hopeful that together we can, because we must. We can have a strong and prosperous economy, but we have to solve these problems."